On January 14, 2011 just after celebrating the Christmas holidays, a perilous fire erupted in St. Petersburg, FL causing massive damage throughout the Sheldon family home. Lucky to have survived the fire, the husband and wife team and devoted parents quickly caught their breath and proceeded to make the best out of the situation assuming their insurance company would help them by responding the same. They had no idea that this would turned into a 3 ½ year ordeal that would bring nothing but stress and heartache upon this strong family who lost everything.
Immediately following their fire in January 2011, the Sheldon’s reported their insurance claim to the Citizens Property Insurance Corporation of Florida. They were quickly informed that Citizens would be sending out an adjuster who was assigned to help them recover from their devastating damage. Instead, the Citizens claim adjuster called upon his contractor friends to help him estimate the loss apparently hoping that one of them could land the rebuild job. This was a win for Citizens to get its preferred vendor contractors in there and a win for the contractor who would be paid for cleaning the house. What happened to the Sheldon’s clothing items? They were hauled off by another preferred vendor to be dry-cleaned to the tune of $20,000 only to be returned smelling of smoke and chemical cleaning agents, but that’s another story.
During that time, the Citizens adjuster also advised the Sheldon family against the use of a public insurance adjuster. Admittedly, the Sheldon’s never knew what a public adjuster was, but when discussions started going south with Citizens and their contractors, the Sheldon’s started researching.
In March 2011, after receiving an unrealistic repair estimate and offer of settlement from Citizens, the Sheldons hired Tutwiler and Associates as their public insurance adjusters to help them with the fire loss claim. Public adjuster Rick Tutwiler reviewed and documented the damage and situation and then presented the claim to Citizens, explaining that they were missing the mark by tens of thousands of dollars. After much delay, local media who was following the case decided to run a story which can be viewed here.
In response, Citizens acknowledged it owed more money, but after repeated requests to pay the undisputed funds, Citizens would not. Instead, Citizens made payment conditional in exchange for a Release of the entire claim. While this was going on, the Sheldon’s exhausted their Additional Living Expense Coverage as Citizens preferred housing company racked up the bills forcing them to move from the rental home they were in and rely on the good graces of friends and family to take them in for the next few years.
“This is about as bad as it gets,” commented public adjuster, Rick Tutwiler. “I’ve seen some pretty malicious things from insurance companies, but this was absolutely blatant. If any other Florida admitted insurance company got caught acting like this, they would suffer severe legal consequences. But the state exempts Citizens from these penalties. Most carriers make sizable payments to avoid litigation and media attention in exchange for confidentiality agreements, which is why you never hear about them.”
In this particular case, the Sheldon’s were forced to hire an attorney who filed a breach of contract lawsuit against Citizens.
At a pre-suit mediation, Citizen’s attorneys bullied the Sheldon’s and threatened to allege a fraud defense if they proceeded with the lawsuit and did not take the settlement being offered. The Sheldon’s, knowing they did not commit fraud, declined Citizens offer and Citizens prepared a case accusing the family of fraud.
After 3 ½ years and with the Sheldon’s still out of their home, the case finally settled. The Sheldon’s prevailed against all the odds and won their case against the Citizens Property Insurance Corporation. A big thanks to Matt Danahy and the team at Danahy & Murray, P.A. who took on this case and helped the Sheldon’s.
Sadly, our firm is seeing similar patterns in other existing fire claims where the insurance losses are well documented and Citizens is following this same tact and hard line to follow the litigation route rather than to properly adjust the claim. In a recent article “Citizens racks up millions in attorneys’ fees as it denies claims” written by the Miami Herald on September 9, 2013, Citizens is now averaging an estimated $2 million each month to battle policyholders over getting their claims paid. According to the article, between January 2011 and June 2013, Citizens has spent more than $16 million to defend against lawyers from 177 different law firms who have successfully challenged the state’s largest insurance company on behalf of policyholders. Citizens claims it will need to raise rates to cover the litigations costs. Our view is we haven’t had a hurricane in 8 years so there should be plenty of money to pay the claim costs, not line the pockets of attorneys to wrongfully deny claims and lobbyists tto eliminate public insurance adjusters who help policyholders in situations like the Sheldon’s.